Corporate immigration in Canada

FW speaks with Howard Greenberg, a partner at KPMG Law LLP, about corporate immigration in Canada.

FW: Could you briefly outline the main principles governing corporate immigration in Canada? What impact, in broad terms, do these rules and regulations have on business operations in the country?

Greenberg:Canadian immigration principles place significant importance on employing Canadians first – temporary foreign workers should be a last resort, and are generally viewed as a temporary solution to shortages in the Canadian labour market. There are two programs currently in place for employers seeking to employ temporary foreign workers. The Temporary Foreign Worker Program (TFWP) requires employers to test the Canadian labour market to demonstrate a labour shortage. On the other hand, the International Mobility Program (IMP) facilitates the entry of foreign workers based on international trade agreements for workers with particular skills. Where foreign workers are relied upon, there is an expectation that employers will work towards transitioning them to permanent residence, where applicable. In an effort to prevent the abuse of immigration regulations, the Canadian government has implemented strict compliance regimes which employers must adhere to in order to hire foreign workers. Employers may, therefore, be required to implement comprehensive recruitment systems which demonstrate appropriate efforts to hire Canadians first, maintain concise records, comply with on-site visits by government officials, and ensure that foreign workers’ rights are respected. In terms of applying for permanent residence, significant processing changes are scheduled to take effect in January 2015, which will permit Canada to be more discerning in selecting permanent residents possessing the desired combination of skills. Prospective candidates will be invited to submit an application provided prescribed thresholds are met. Through these processing changes, known as Express Entry, the Canadian government is expecting faster processing and a more targeted selection process.

FW: Would you say that corporate immigration policies in Canada are relatively open or closed to foreign nationals? What are the underlying reasons behind this?

Greenberg:In certain respects, Canadian corporate immigration policies are very generous – this is clearly evident by the absence of specific quotas for high-skilled temporary foreign workers and relatively high immigration targets which place Canada in the top ten processing countries. The reality is that Canada has, for a number of years, recognised the importance of immigration to Canadian economic and cultural development. Canada will also be implementing the new Express Entry program, which is expected to result in six months or less processing standards for permanent residents. Despite Canada’s generous immigration policies, recent changes to the entry of temporary foreign workers have been dramatic. Canada’s doors remain open for particular skill shortages that have been identified – in some instances, processing times have been expedited considerably for such applicants. However, Canadian employers are now strongly discouraged from using temporary foreign workers as a long-term workforce. The message to employers is clearly to employ Canadians first and rely on temporary foreign workers only as a last resort.

In an effort to prevent the abuse of immigration regulations, the Canadian government has implemented strict compliance regimes which employers must adhere to in order to hire foreign workers.

FW: What limitations does Canada place on immigration with regard to caps and desired skill sets?

Greenberg:Generally, Canada has not placed caps on the number of temporary foreign workers that may enter Canada. Nonetheless, employers may be restricted from hiring low-wage foreign workers where the proportion of foreign workers to Canadian employees exceeds a certain threshold. ‘Low-skilled’ foreign workers may also be limited to a four-year duration in Canada. In terms of permanent residents, Canada receives approximately 250,000 immigrants annually through various permanent residence categories, including the Federal Skilled Worker Program (FSWP) and the Canadian Experience Class (CEC), both of which target applicants with specific and desired skill sets. Canada’s provinces also play a key role in selecting permanent residents in accordance with their individual priorities. Each province is subject to its own cap; however, candidates selected by provinces, referred to as Provincial Nominees, are expected to become a larger part of Canada’s total immigration plan in the future, as it is clear that the provinces may be in the best position to determine their particular immigration needs.

FW: Could you explain the ‘express entry’ system announced in recent months? What are the benefits of this system?

Greenberg:Express Entry is an intake system for applications for permanent residence in Canada. It is not a new category of permanent residence, but rather a process used to identify the best applicants from a pool of candidates. Although very little official information about the program has been released, it is anticipated that candidates will be ranked on a point system – 200-600 points – that will take into consideration a number of factors, including whether or not the applicant has a job offer from a Canadian employer. It is anticipated that applicants who meet the current immigration program criteria for the Provincial Nominee Program (PNP), Canadian Experience Class (CEC), Federal Skilled Worker (FSW) or the Federal Skilled Traders (FST) will qualify for permanent residence under the new system. Highly ranked applicants will receive an ‘Invitation to Apply’ for permanent residence. Applicants with a job offer from a Canadian employer, or who have been nominated by a province, are expected to be among the first to receive such an invitation. The anticipated benefits of the new system include faster processing times for permanent residence applications – as fast as six months – and a guided selection of immigrants based on identified attributes. What remains uncertain are the specifics of the program, including eligibility criteria for applicants.

Express Entry is an intake system for applications for permanent residence in Canada. It is not a new category of permanent residence, but rather a process used to identify the best applicants from a pool of candidates.

FW: How has the rise of the BRIC nations influenced the corporate immigration landscape in Canada? What steps does the government take to attract skilled workers from elsewhere?

Greenberg:With respect to the BRIC nations, India has had a significant impact on the corporate immigration landscape in Canada. The Canadian government has expressed its desire to maintain a strong immigration relationship with India and is currently in the process of negotiating a Canada-India Trade Agreement. There are also a number of programs in place to facilitate the entry of Indians into Canada, including an express program for business travellers, tourists and students. Despite this, applications submitted to Visa Offices in India receive the highest level of scrutiny, particularly with respect to the Intra-Company Transferee (ICT) category for workers possessing specialised knowledge in the information technology industry. Similar levels of scrutiny were seen noted for ICT applications submitted to visa offices in China. Due to allegations of abuse from Indian applicants claiming to possess specialised knowledge in the information technology industry, the Canadian government reviewed this category and the qualifying criteria. Immigration officers now review ICT specialised knowledge applications with increased scrutiny and applicants are required to meet more stringent qualifying criteria. Although the review was triggered by applications in India in the information technology sector, all specialised knowledge applications are subject to the heightened scrutiny.

FW: Could you outline Canada’s new Start-up Visa program? What are the provisions of the initiative, and what factors have driven its introduction?

Greenberg:The Start-up Visa is an innovative opportunity for Canada to identify and welcome the next generation of entrepreneurs. An applicant may qualify if all of the following criteria are met: his or her business venture or idea is supported by a designated investor group – that is, if a letter of support is received; he or she meets specific language requirements; he or she meets specific education requirements; and he or she has a minimum amount of settlement funds. The investor group or sponsor makes the investment in the ‘idea’. A minimum investment of $200,000 is required if the investment comes from a designated Canadian venture capital fund; whereas a minimum of $75,000 is required if the investment comes from a designated Canadian angel investor group. Alternatively, the applicant may also be accepted into a designated Canadian business incubator program. The Start-Up Visa program was introduced in order to attract entrepreneurs – which will result in the creation of jobs or technology development in Canada.

FW: What are the reasons behind the moratorium on Canada’s Temporary Foreign Worker Program? What criticisms has it drawn?

Greenberg:On 24 April 2014, in response to allegations of abuse of the TFWP, the Canadian government announced a moratorium on the food services sector’s access to the program. Simply stated, there were allegations that temporary foreign workers were displacing Canadians in low paying jobs or were preferred over Canadians in obtaining greater working hours. The moratorium provided the Canadian government with an opportunity to develop and implement more stringent rules governing the employment of temporary foreign workers in low-wage positions, which became effective on 20 June 2014, when the moratorium ended. While the moratorium has ended, employers in the food services sector still face difficulties hiring foreign workers. Employers with a high proportion of low-skilled foreign workers must reduce this proportion to 10 percent or less of their workforce by 2016. Exemptions have not been made for employers that require higher proportions of low-skilled foreign workers where Canadians are unwilling to assume the positions. Exemptions similar to the live-in-caregiver program would have been beneficial, particularly in certain rural regions, where there is a clear labour shortage. This seems to imply that businesses may be forced to close if unable to adequately staff their establishments. While the Canadian government has announced the low-skilled class will remain open, the lack of flexibility seems to suggest the end of the low-skilled class of temporary foreign workers in particular sectors.

When considering the termination of a temporary foreign worker, employers should take into account the impact termination may have on the temporary foreign worker’s permanent resident application, particularly where the employer has sponsored the application.

FW: Are there any major legal developments on the horizon which would affect corporate immigration in Canada?

Greenberg:Through the recent changes to Canada’s temporary immigration programs, the Canadian government has announced further amendments which are expected to be implemented over the course of the next year until late 2015. These amendments will include additional fees, a strengthened compliance regime – including monetary fines and criminal investigations – and an expanded inspection regime. It is also expected that third parties will be compelled to provide documentation to verify compliance, including banks and payroll companies. These changes raise privacy concerns for both employers and the employees.

FW: What considerations should Canadian companies make when hiring, retaining, transferring or even terminating non-domestic workers?

Greenberg:When hiring a temporary foreign worker, it is critical to commence the immigration process as early as possible. Processing times may be extensive and vary significantly depending on the immigration category and the nationality of the temporary foreign worker. Countries with trade agreements with Canada may benefit from immigration categories that do not require testing the Canadian labour market, which may significantly decrease processing times, however, advanced planning is crucial. When considering the transfer of a temporary foreign worker, new or amended documentation may be required to maintain compliance with immigration regulations, which may also include extensive processing times. With respect to retaining temporary foreign workers, the Canadian government has reiterated that employers are not expected to rely on temporary foreign workers as a long-term solution. Therefore, employers should consider transitioning temporary foreign workers to permanent residence as quickly as possible. When considering the termination of a temporary foreign worker, employers should take into account the impact termination may have on the temporary foreign worker’s permanent resident application, particularly where the employer has sponsored the application. In addition, status documents of family members may be linked to the primary applicant, thus termination may have significant implications for an employed spouse and children attending school. At all times, employers must be cognisant of their compliance obligations. Specifically, the Canadian government has implemented increased compliance requirements, and has substantially increased its ability to identify and detect instances of non-compliance, As such, it is essential that employers participating in Canada’s temporary immigration programs establish internal policies to maintain documentation and ensure ongoing compliance.

FW: What general advice would you offer to companies on planning and implementing an effective corporate immigration program?

Greenberg:Corporate immigration policies must take into account the objectives of the TFWP, including identifying and hiring Canadians first. The implementation of an immigration compliance officer is a critical component of ensuring compliance with all aspects of the program on an ongoing basis. Employers may also consider the development of detailed assistance for domestic and foreign workers to determine potential non-compliance, for example, a 24/7 hotline to report issues. Additionally, clearly outlining which services will be paid for by the employer can often serve as a persuasive factor for temporary foreign workers, including relocating costs, covering the cost of family members’ applications, covering costs associated with permanent resident applications, and so on. Employers should clearly outline which costs will be covered both for temporary and permanent immigration from the outset. Employers should also consider including clear language in documentation to new employees outlining the employer’s obligation to put Canadians first, while treating foreign workers fairly.

Howard Greenberg is a partner at KPMG Law LLP and its affiliated firm KPMG LLP, serving as the global immigration leader of the Global Immigration Services’ worldwide network within the International Executive Services (IES) practice. He is also responsible for managing and overseeing KPMG Law LLP’s immigration practice. Mr Greenberg has dedicated over 26 years to Canadian Immigration and specialises in corporate and executive cross-border transfers to Canada, the US and globally, all of which has awarded him industry recognition. Mr Greenberg founded KPMG Law LLP’s predecessor firm, Greenberg Turner in 1995. He can be contacted on +1 416 943 0288 or by email: hgreenberg@kpmglaw.ca.